The Securities and Exchange Board of India (SEBI) on December 04, 2025, issued a consultation paper on the review of existing position limits for trading members in the equity derivatives segment.
It has released a consultation paper proposing changes to Trading Member (TM) position limits in index options to bring them in line with the Futures Equivalent (FutEq) / Delta-adjusted metrics already applied at the client level from May 29, 2025.
Currently, client-level limits for index options are measured using FutEq values, whereas TM limits continue to be based on notional contract value, creating a mismatch in how risk and exposure are monitored.
SEBI aims to:
• Align TM position limit calculations with client-level delta-based FutEq metrics.
• Introduce slab-based absolute limits in addition to percentage-of-OI limits to prevent a single TM from taking disproportionately large positions in indices with low open interest.
• Ensure TMs can compute and monitor their FutEq exposure intraday to avoid breaches during market hours.
At present, TM limits are the higher of ₹7,500 crore or 15% of total open interest for index futures and options. However, using notional values may allow a TM to dominate low-OI markets, raising concerns about market integrity.
SEBI has drafted a revised framework for TM limits (provided in Annexure 1) and has invited public comments by December 26, 2025, via the SEBI online portal. In case of technical issues, comments may be emailed to [email protected] with the subject line: “Consultation Paper on Review of existing position limits for Trading Members in Equity Derivatives Segment”.
Please refer to the document attached below for more details.
